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Legal Alert January 21, 2016 Federal Court of Appeal Confirms Lower Court Decision on Meta Tag Copying On 18 December 2015, the Federal Court of Appeal in Red Label Vacations Inc v 411 Travel Buys Ltd[1] confirmed a lower court’s decision that using a competitor’s trademarks as meta tags for a website did not amount to, among other things, trademark infringement, depreciation of goodwill, or passing off. This decision could create an incentive for rivals of brand name companies to more aggressively use meta tags in Canada. Background Meta tags are words or phrases incorporated into a website’s code to highlight its content, but are not actually visible when viewing a website. They allow search engines to index the site so it can be matched to users’ queries when those keywords are searched. The defendant, 411 Travel Buys Ltd. (“411”), copied meta tags from the plaintiff’s, Red Label Vacations Inc. (“Redtag”), website when creating its own website. Redtag’s meta tags included its registered trademarks “red­tag.ca”, “redtag.ca vacations”, and “Shop. Compare. Payless!! Guaranteed”. As a result, when users searched for terms included in the marks “red­tag.ca”, “redtag.ca vacations”, and “Shop. Compare. Payless!! Guaranteed”, search results would include the defendant’s website: www.411travelbuys.ca. The Decision All of Redtag’s claims were dismissed at both the Federal Court and Federal Court of Appeal. In brief: Trademark infringement The Federal Court of Appeal agreed that there was no trademark infringement because 411 did not visibly use Redtag’s trademarks on its website and so it (a) did not associate its services with the plaintiff’s trademarks, and (b) did not ‘use’ Redtag’s trademarks, as defined by the Trade­marks Act, for the purposes of distinguishing or identifying its services from those of others. The Federal Court of Appeal did stress that, in some situations, inserting a registered trademark in a meta tag may constitute advertising of services that could give rise to a claim for infringement; however, this was not such a case. Depreciation of goodwill On the same basis as its finding of no infringement, the Federal Court of Appeal agreed that there could be no depreciation of goodwill since Redtag’s trademarks were not used by 411 on its website in connection with its goods or services.[2] Passing off The Federal Court found that the likelihood of confusion, an essential element for establishing a passing off claim, cannot occur while users are searching for a website because those users can still choose their desired website from which to purchase goods and services. Rather, likelihood of confusion can only occur after consumers have actually viewed a particular website—at which point, they are able to back out of that website if it is not what they are looking for, and instead go to the website of their choosing. Since the Federal Court’s conclusions were based on findings of fact, and Redtag failed to show any palpable and overriding error, the Federal Court of Appeal dismissed this ground of appeal. The same conclusion was recently reached by the British Columbia Supreme Court in Vancouver Community College v Vancouver Career College (Burnaby) Inc,[3] which dealt with Internet keyword advertising. The court found that the relevant ‘first impression’ of a user—the point at which the potential for confusion arises—cannot arise on an AdWords search (i.e. at an earlier time than when a user reaches a given website). If there is no likelihood of confusion with respect to the source of goods or services on the website, there can be no support for passing off. Conclusion The Red Label and Vancouver Community College decisions arguably leave few limits on the use of another’s trademark to market one’s competitive products or services online. If accepted, these principles could create an incentive for rivals of brand name products or services to use meta tags and AdWords very aggressively in Canada. It is important to note that the courts’ findings were highly factdependent, and, in the Red Label decision, accompanied by a caveat that this decision does not foreclose the possibility that using a trademark in a meta tag could give rise to a claim for infringement. Based on the courts’ reasoning, such use would need to be accompanied by use of the plaintiff’s trademarks on the defendant’s website, or the sale of goods or services that are designed to look like those offered by the plaintiff. [1] 2015 FCA 290 [Red Label]. [2] Red Label Vacations Inc v 411 Travel Buys Ltd, 2015 FC 19. [3] 2015 BCSC 1470. For more information Contact Information: Christopher Aide Toronto +1 416 865 6926 Christopher.Aide@bakermckenzie.com Jim Holloway Toronto +1 416 865 6914 Jim.Holloway@bakermckenzie.com Essien Udokang Toronto +1 416 865 6872 Essien.Udokang@bakermckenzie.com Andrew Chien Student­at­Law +1 416 865 2315 Andrew.Chien@bakermckenzie.com Privacy Policy Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. 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